High end products

user182

Have you had any success selling high end products like DiVinci slate or Lamarite, or even high end asphalt like Grand Manor?

If so did the customer respond to marketing piece that offered it?

Or did they ask you to quote on it?

Grumpy

Nope, Nope and Nope. We work on alot of high end homes but the only homes I see that stuff going on is new construction, and we do very little of that.

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-Grumpy
Chicago Gutters Chicago Roofing

Ed the Roofer

With asphalt shingle prices still climbing, they may be a better option soon.

Ed

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Just Wait A Minute, I Will Be Right Back With A Link For That.
http://www.rightwayroofingcompany.com/ www.rightwayroofingcompany.com
Roof Estimates, Roof Repairs, Roofers, Roof Leak Help, Elgin, Carpentersville, East Dundee, West Dundee, Sleepy Hollow, Algonquin, South Elgin, Huntley, Lake In The Hills, Illinois

Grumpy

Soon, yes. And I can't wait. I'd love to do more of this stuff, with cedar prices on the rise in the past few years it almost became equivelant from Divicni vs mediums. Davinci is still less than slate but when isntalled Davinci is twice the cost of a asphalt shingle roof.

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-Grumpy
Chicago Gutters Chicago Roofing

OUTLAW

I seem to have better luck in closing the sale if the prospect is looking specifically at hich end products such as metal, eco-star, or lifetime shingles.

A few people have even surprised me by going with the best in a good, better, best sale.

Ed the Roofer

I get around 10 % going with the Best option out of the Good-Better-Best method.

Thats 10 % more than if I did not offer it.

Question to all guys who offer upgrades.....

Do you just add the cost of the upgraded price for the materials, or do you mark up each category selection a bit more than the previous lower end quality selection offered?

Ed

__________________
Just Wait A Minute, I Will Be Right Back With A Link For That.
http://www.rightwayroofingcompany.com/ www.rightwayroofingcompany.com
Roof Estimates, Roof Repairs, Roofers, Roof Leak Help, Elgin, Carpentersville, East Dundee, West Dundee, Sleepy Hollow, Algonquin, South Elgin, Huntley, Lake In The Hills, Illinois

user182

I have 3 profit levels.

You will recall the conversation we had about mark up. Net profit gets added on last. IT should be differant based on the quality of the product.

Standard
Premium
Luxury

Grumpy

Since I apply a variable of 45% once labor and material have been factored... the more expensive the material the more profit. I was at a certainteed round table meeting yesterday and they suggested doubling your profit for the better and tripling for the best. That might be a little bit excessive, if I need to make $1k a day for 3 tabs(good), I don't need to make $2k a day 30 year architecturals(better).

I suppose the theory here is that if architecturals cost 20% more than 3 tabs, and I am marking up that 20% difference that's really an extra 9% profit for the company(45% of 20%)... and if grand manors are 200% the cost of 3 tabs, that's really an extra 90% profit for me (45% of 200%). So I am nearly doubling my profit per day from good to best. Therefore, I also have the most roof for negotiation on my "Best" product lines.

To those that think 45% is low, marking up labor to cover for overhead is a topic for a whole other thread. I was just using the numbers above to explain my increased profit margins on the good-better-best theory.

__________________
-Grumpy
Chicago Gutters Chicago Roofing

user182

First you have to define what you mean by profit. Are we talking about gross profit or net profit?

Some contractors believe that they are making a profit just because they made a sale.

Net profit = Sales - direct cost - overhead

I think they are referring to net profit when they say you should be able to double it.

I no longer offer 3tabs so Landmark would be the standard product for me. The next level up would be Landmark Premium and last would Grand manor or some other High End product.

For example if you make a 5% net profit on Landmark you should be able to make 10% net profit on Landmark Premium, and 15% on Grand Manor, according to their theory.

This is another reason why net profit should be added on last, because it’s going to be different for each product. Here’s how:

• figure labor and material cost
• Mark up labor and material to cover overhead
• Add on net profit to get your price, you will have 3 levels of net profit.

We are only talking about a theory developed by manufacturers, it’s only a theory. They really don’t know how to help you sell or make a profit.

They think they know our end of the business but I beg to differ.

If they did understand what we are trying to do they would have a simplified warranty program. Try showing that SureStart Plus chart to a homeowner and see if they understand it. It won’t help you make a sale, it will probably cause you to loose a sale.

OUTLAW

Jack

I think you're right on the money about net profit. That is why it can be harder to sell the high end if you figure everything at 45% gross. Just the increases in prices this last year can distort this number.

I disagree with you about SureStart Plus. I'm 100% sure that it has help me close some sales.